The calculation of Average FC, Average VC, and Average TC are shown in the table below considering

the known values of fixed cost and the variable costs at different levels of output.

The values are given below:

Quantity TFC TVC AFC AVC TC ATC

1 200 10 200/1=200 10/1=10 200+10=210 210/1=210

2 200 20 200/2=100 20/2=10 200+20=220 220/2=110

3 200 40 200/3=66.67 40/3=13.33 200+40=240 240/3=80

4 200 80 200/4=50 80/4=20 200+80=280 280/4=70

5 200 160 200/5=40 160/5=32 200/160=360 360/5=72

6 200 320 200/6=33.33 320/6=53.33 200+520=520 520/6=86.67

7 200 640 200/7=28.55 640/7=91.43 200+640=840 840/7=120

Formulas used:

TC = TVC + TFC ATC = TC/Q

AFC = TFC/Q

AVC = TVC/Q

From the table, observe that the ATC is minimum at 4 Units of output with ATC =$70